July 27, 2023 – A non-profit organization founded to support the state’s Department of Natural Resources (DNR) in its activities related to a state park has both capacity and standing the sue the DNR, the Wisconsin Court of Appeals has ruled.
In Friends of Blue Mounds State Park v. Wisconsin Department of Natural Resources, 2022AP1127 (June 27, 2023), the Court of Appeals District I held that nothing in the non-profit organization’s articles of incorporation waived its capacity to sue the DNR.
Organized to Support DNR
The Friends of Blue Mound State Park (Friends) is a non-profit corporation organized under Wis. Stat. chapter 181.
The Friends’ purpose is to support the DNR in providing services to visitors to Blue Mound State Park (Park).
According to the Friends’ articles of incorporation, the corporation may “conduct any lawful activities of charitable and educational nature to support, assist, and promote” the DNR.
Under an agreement executed with the DNR, the Friends is eligible for certain benefits as a “friends group.”
Snowmobile Trail Sparks Lawsuit
In May 2021, the DNR adopted a master plan for the Park. The plan authorized the DNR to make a new snowmobile trail in the Park.
In June 2021, the Friends challenged the DNR’s adoption of the master plan in Dane County Circuit Court. The Friends alleged that the DNR had failed to perform an adequate environmental analysis of the impact of the new trail.
In August 2021, the Friends filed a second petition for review in Dane County Circuit Court, challenging the DNR’s decision to deny their petition for a contested case hearing.
The DNR moved to dismiss the Friends’ petitions. The DNR argued that the Friends had neither capacity to sue nor standing.
The Dane County Circuit Court consolidated the two petitions and transferred the case to Iowa County Circuit Court.
The Iowa County Circuit Court granted the DNR’s petition to dismiss but granted the Friends’ motion to stay parts of the master plan and continued the stay, pending appeal.
Friends Retain Ch. 181 Authority to Sue
Writing for a three-judge panel, Judge Timothy Dugan began his opinion by explaining that not every entity has capacity to sue under Wisconsin law.
The Friends argued that chapter 181 gave it authority to sue because under section 181.0302, a corporation has the same power as a person “to do all things necessary or convenient to carry out its affairs,” unless the articles of incorporation provide otherwise.
The DNR argued that the Friends did not have capacity to sue because provisions in state law make clear that “Friends groups” exist only under the authority of state law.
define the types of entities eligible to qualify as a friends group (section 27.016(1)(b));
authorize the DNR to set up a grant program for friends groups (section 27.016(2)(a));
direct the DNR to offer grants to eligible friends groups before non-profit conservation groups (section 23.098(4)(am)); and
require qualifying friends groups to execute written agreements with the DNR.
But the court of appeals concluded that qualifying as a friends group did not deprive the Friends of the authority granted it by chapter 181.
DNR Rules Don’t Prohibit Suit
The DNR argued that several of its administrative rules related to friends groups were evidence that the Friends lacked the capacity to sue.
Among other things, those rules:
define a qualifying friends group as a non-profit corporation that’s organized to promote the DNR’s missions and activities;
require that the articles of incorporation and bylaws of a qualifying friends group direct the group to focus its activities on supporting DNR facilities or programs; and
require a qualified friends group to submit an annual fiscal report to the DNR upon request.
But Judge Dugan focused on what the rules cited by the DNR didn’t contain.
“Importantly, missing from this long list of requirements is any language to suggest that qualifying friends groups are prohibited from filing suit against the Department,” Dugan wrote.
Friends Meet Standing Test
The DNR also argued that the Friends’ failed to meet the two-pronged test for establishing standing employed by Wisconsin courts.
The DNR argued that the Friends had failed to show that their interest was one recognized or sought to be protected by state law, the second prong of the test.
The circuit court concluded that the Friends lacked standing because its interests did not fall within the zone of interests protected by the Wisconsin Environmental Policy Act (WEPA).
But, Judge Dugan pointed out, the Wisconsin Supreme Court in a 2022 decision jettisoned the zone of interests test for determining whether a party has standing under WEPA.
Dugan noted that the Wisconsin Supreme Court has repeatedly recognized a broad range of interests sufficient to confer standing under WEPA, Dugan noted.
He cited two examples from caselaw: 1) the potential indirect harm from an agency’s failure to prepare an environmental impact statement; and 2) the prospect of added traffic in the area where a party owned a facility as the result of an agency’s proposed siting of a prison.
Court Distinguishes Cases
The DNR argued that WEPA did not protect the specific interest that the Friends sought to protect by bringing the legal challenge against the new trail.
But Judge Dugan noted that the two cases cited by the DNR in support of that argument did not involve parties who claimed standing under WEPA.
“We conclude that the Friends has standing to challenge the Department’s revised master plan that authorized the creation of a new snowmobile trail within Blue Mound State Park,” Judge Dugan wrote.